Variable annuities may be appropriate for a high tax bracket long term investor with a desire for market returns with an understanding of the risk.
A tax deferred variable annuity is a security and an insurance product. Because a variable annuity is a security, potential product purchasers need to determine their risk tolerance for market losses. High tax bracket, long term investors may also benefit from the tax deferral of variable annuities. A variable annuity has a general interest rate earning account and separate sub accounts using equity and bond investments. Policy expenses are deducted from premiums, i.e. net premiums. Net premiums are then invested in the either the general account or separate sub accounts or both. Net premiums invested in the allocations in the separate sub accounts that are either credited with gains or debited with losses depending on performance. Most variable annuities are purchased in a qualified or non-qualified plan for future income.
In Canada, variable annuities are called segregated funds or seg funds. They are similar to mutual funds, but since they are issued by insurance companies they have certain guarantees. They should be considered when you are looking to invest equity investments. Whether they are a good investment or not, depends on your individual circumstance. They are of special interest if you are self employed (at any age) OR are within 10 to 15 years of retirement (or already retired).
The maturity and death benefit guarantees (100% or 75%) , locking in of market gains with maturity resets, the estate bypass with a named beneficiary, and the potential creditor protection are some of the factors to consider.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
.JPG){kind=avatar}
Variable annuities may be appropriate for a high tax bracket long term investor with a desire for market returns with an understanding of the risk.
A tax deferred variable annuity is a security and an insurance product. Because a variable annuity is a security, potential product purchasers need to determine their risk tolerance for market losses. High tax bracket, long term investors may also benefit from the tax deferral of variable annuities. A variable annuity has a general interest rate earning account and separate sub accounts using equity and bond investments. Policy expenses are deducted from premiums, i.e. net premiums. Net premiums are then invested in the either the general account or separate sub accounts or both. Net premiums invested in the allocations in the separate sub accounts that are either credited with gains or debited with losses depending on performance. Most variable annuities are purchased in a qualified or non-qualified plan for future income.
The maturity and death benefit guarantees (100% or 75%) , locking in of market gains with maturity resets, the estate bypass with a named beneficiary, and the potential creditor protection are some of the factors to consider.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.